why and how people buy: the power of understanding the ......buyology: truths and lies about why we...
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This is “Why and How People Buy: The Power of Understanding the Customer”, chapter 6 from the book PowerfulSelling (index.html) (v. 1.0).
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Chapter 6
Why and How People Buy: The Power of Understanding theCustomer
Video Ride-Along with Rachel Gordon, Account Manager atWMGK Radio
Meet Rachel Gordon. Rachel has been in sales for three years and has learned that selling is aboutunderstanding the customer’s needs and wants. Rachel sells advertising and marketing programs tobusinesses such as casinos, restaurants, car dealerships, and local businesses. Rachel graduated from CornellUniversity with a degree in fashion merchandising. After two years in retail, she learned that selling is herpassion.
Ride along with Rachel and learn how she identifies the decision maker versus the influencer in a sales calland why each is important to making the sale.
(click to see video)
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6.1 Buying 101
LEARNING OBJECTIVES
1. Describe the different types of customers and why this information isimportant in determining customers’ needs.
2. Discuss the implications of Maslow’s hierarchy of needs for selling.3. Learn the types of buyers and buying situations in the business-to-
business (B2B) environment.
You walk into an Abercrombie & Fitch store at the mall, and without thinking aboutit, you turn to the right and make your way through the denim, past the belts, andto the sweaters. You are so engaged in the experience that you didn’t even realizethat the huge mural at the entrance to the store serves a purpose other than tomake you look twice at the hot model in the larger-than-life photo. Before youknow it, one of the oh-so-gorgeous salespeople dressed in Abercrombie from headto toe approaches you with a smile. “These hoodies are awesome,” she says as youpick up the pale blue one.
Shopping. It’s the national pastime for some but a detested necessity for others.Whether you love shopping (“Oh, that is sooooooo cute!”) or do everything to avoidit (“I’m not going to the mall, no matter what”), it is a major source of spending inthe United States. In fact, the retail industry generated $4.475 trillion in sales in2008, including everything from products and services in retail stores and e-commerce to food service and automotive.Barbara Farfan, “Retail IndustryInformation: Overview of Facts, Research, Data, and Trivia,” About.com,http://retailindustry.about.com/od/statisticsresearch/p/retailindustry.htm(accessed August 3, 2009). That’s a lot of selling—and a lot of buying. But whatmakes you stop and pick up one sweater but not another? What makes you buy apair of jeans you weren’t even looking for? What makes you walk out of the storespending more than you had planned?
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Figure 6.1
Retailers recognize that displayscan impact how customers buy.
© 2010 JupiterimagesCorporation
Inside Consumer Behavior
The science of consumer behavior describes and evendefines how you shop and, more importantly, why youbuy. Smart retailers study consumer behavior patternsand lay out their stores and merchandise accordingly.For example, did you know that 86 percent of womenlook at price tags when they shop, while only 72 percentof men do?Paco Underhill, Why We Buy: The Science ofShopping (New York: Touchstone, 1999), 99. And did youknow that the average shopper doesn’t actually noticeanything that’s in the entrance of a store? According toPaco Underhill, famous marketer, CEO and founder ofEnviroSell, and author of the book Why We Buy: TheScience of Shopping, consumers don’t actually beginshopping until a certain point after they enter the store.That’s why smart retailers include a “transition zone” atthe entry to their store; it allows customers to get theirbearings and choose their shopping paths. In other words, products, signs, anddisplays that are in the very front of the store might not be seen if there is not atransition for the customers when they enter. In the case of Abercrombie & Fitch,the transition is the space just inside the entrance that includes the humongousphoto of the Abercrombie model du jour. When you go into Hollister, it’s theoutside porch that serves the same purpose; it’s a transition that allows you to getyour focus and plot your course in the store, even if you don’t consciously realize it.
Think about the last time you went into a grocery store or drug store; you might nothave noticed anything until you were well inside the store, which means that themerchandise and signs that were displayed in the area before you got your bearingswere virtually invisible to you.Paco Underhill, Why We Buy: The Science of Shopping(New York: Touchstone, 1999), 46. Based on consumer research, there’s a highlikelihood that you turned right when you entered the store. Take note the nexttime you go shopping; chances are, you’ll turn right after you walk in.PacoUnderhill, Why We Buy: The Science of Shopping (New York: Touchstone, 1999), 46.
Understanding how and why customers buy can make a significant difference inhow you sell. Is the product a considered purchase, like a computer or car, or animpulse buy, like a sweater or music download? Is the product bought frequently,like an energy drink, or only once every few years or even once in a lifetime, like acar or a college education? For each of these products, the customer goes through abuying process. Understanding the customer and the buying process can make yourselling efforts successful. This video featuring Martin Lindstrom, the author of
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Buyology: Truths and Lies about Why We Buy, highlights the science of consumerbehavior in selling and marketing
Video Clip
Video Book Review
(click to see video)
Buyology: Truths and Lies about Why We Buy
Source: BNET
Do You Need It or Want It?
Think of something you need, like an annual medical checkup, a new apartmentbecause your lease is up, or even food to survive. There are some products andservices you purchase solely because you can’t exist without them. Now think aboutsomething you want: a new pair of jeans, an iPhone, tickets to a concert. There is asignificant difference in what motivates you to buy products and services you need,compared to those you want.
Needs versus Wants
Needs1 are essentials, those products and services you literally cannot live without.Food, shelter, clothing, transportation, and health care are all examples of needs.Wants2, on the other hand, are products, services, and activities that can improveyour quality of life; you don’t need them to exist, but rather you desire to havethem because you think they will make you happy.Kristin Biekkola, “Needs versusWants,” slide show, Wisc-Online.com, http://www.wisc-online.com/objects/index_tj.asp?objID=ABM3302 (accessed August 2, 2009). Cell phones, vacations,sporting events, restaurants, amusement parks, cable television, and fashion are allexamples of wants. People are motivated differently depending on if they aremaking a purchase for a need or a want.
Needs and wants have different motivations. Think about buying a car; you couldfocus on the functional attributes of the car such as miles per gallon, maintenancecosts, and safety ratings. Those are considered utilitarian needs3, or the objective,tangible aspects of a product or service.Michael R. Solomon, Consumer Behavior:Buying, Having, and Being, 8th ed. (Upper Saddle River, NJ: Pearson Prentice Hall,2009), 133. So, if those were your only needs, you might choose a Smart Fortwo,Ford Focus, or Toyota Prius. But you might want to have something a bit sportier,
1. Products or services that areessential in order to survive.
2. Products, services, or activitiesthat enhance the quality of life,but which are not essential forsurvival.
3. Functional needs that areserved by objective, tangibleattributes of products orservices.
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maybe even hipper, to get around campus, and you might choose a Mini Cooper, aScion, or even a Jeep. These cars would do more than simply providetransportation; they would meet your hedonic needs4, which are subjective aspectsof a product or service.Michael R. Solomon, Consumer Behavior: Buying, Having, andBeing, 8th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 133. You mightchoose to buy a Mini Cooper because you can customize the design online. Thatwould certainly meet a need other than providing basic transportation. Somepeople buy a BMW because they want the status that goes with owning that make ofcar, or perhaps they think that having a Mercedes-Benz means they have arrived.
When you understand the difference between needs and wants and between utilityneeds and hedonic needs, you are better able to tailor your selling communications.Listen to consumer behavior expert Dr. Michael R. Solomon discuss the differencebetween needs and wants and the impact it has on selling.
Video Clip
Interview with Dr. Michael Solomon
(click to see video)
Needs versus wants.
Maslow’s Hierarchy of Needs
When Hurricane Katrina hit the United States on August 28, 2005, the Gulf Coastwas devastated. Thousands of people were stranded for days, some without food,water, or shelter due to overwhelming flooding. Almost two thousand people losttheir lives in the natural disaster.United States Department of Health and HumanServices, http://www.hhs.gov/disasters/emergency/naturaldisasters/hurricanes/katrina/index.html (accessed August 2, 2009). During those horrible days and in theaftermath, those who were affected by the catastrophe did not care what kind of carthey drove, what anyone did for a living, or if they forgot to sign up for French orscuba lessons. They were focused on the basics: food, shelter, and clothing.
4. Emotional needs that areserved by products or servicesthat bring pleasure.
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Figure 6.2 HurricaneKatrina Aftermath
© 2010 JupiterimagesCorporation
This tragedy is a demonstration of exactly howMaslow’s hierarchy of needs5 works. Abraham Maslowis among the most renowned psychologists of thetwentieth century. His theory explains human behaviorin simple terms: A hierarchy of needs that begins withthe most basic of physiological needs6 (e.g., food,water, shelter, and clothing) motivates people, andwhen the lowest-level needs are satisfied, they are nolonger motivators.[citation redacted per publisherrequest].
During the days after Hurricane Katrina hit, peoplewere rescued and provided with water, food, andshelter. Many were relocated to temporary housing oreven to housing outside the affected areas. It was notuntil after the physiological needs were met that peoplebecame concerned about the next level of needs on Maslow’s hierarchy: safetyneeds7. Looting of shops in some of the cities began to occur, and there was evenconcern that the police force in some cities was not taking an active role inarresting those who were breaking the law.Associated Press, “Looters TakeAdvantage of New Orleans Mess,” msnbc.com, August 30, 2005,http://www.msnbc.msn.com/id/9131493 (accessed August 2, 2009). The people ofthe Gulf Coast were no longer motivated by simply getting water, food, or shelter;they had moved up Maslow’s hierarchy and were concerned about their personalsecurity and well-being.
Figure 6.3
Maslow’s hierarchy of needs demonstrates that humans fill higher needs only after lower needs are met.
5. The behavior theory thatrecognizes that people aremotivated by their most basicneeds first; only after thoseneeds are met do they strive tomeet higher-level needs.
6. The most basic elementsrequired to survive such asfood, shelter, and clothing.
7. Concerns for personal securityand well-being.
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As the days and weeks passed after Hurricane Katrina hit, its victims wanted to getback to their normal lives. They searched for options to put their children back inschool, ways to get jobs, and options to rebuild their lives. By Christmas 2005,people stopped to celebrate the holiday together. According to a story reported byCBS Evening News on December 25, 2005, about the Christmas gatherings in NewOrleans, “The will to be home for the holidays outweighed everything else.”JoelRoberts, “Christmas After Katrina,” CBS Evening News, December 25, 2005,http://www.cbsnews.com/stories/2005/12/25/eveningnews/main1165360.shtml(accessed August 2, 2009). By this time, they were motivated by social needs8, orthe need to belong and have an attachment or bond to others.[citation redacted perpublisher request].
Slowly but surely, people began to rebuild their lives and their cities. People tookon leadership roles and began to take recovery to the next level. Even people whowere hundreds of miles away from the hurricane-ravaged area wanted to help.Volunteers from all over the country began to make the pilgrimage to the GulfCoast to help in any way they could. In fact, volunteer vacations to help rebuildcities such as New Orleans became commonplace and are still going on today.SherylKane, “Volunteer Vacations: Rebuilding New Orleans,” June 26, 2009,SingleMindedWomen, http://singlemindedwomen.com/2009/06/rebuilding-new-orleans (accessed August 2, 2009). This is an example of esteem needs9, or the needto feel respected and appreciated by one’s peers. Although volunteers weremotivated by social needs and the need to help their fellow human beings, theyfound that they were also greatly appreciated for their efforts.
Although recovery will be going on for years to come, many of the people affectedby the destruction of Hurricane Katrina are striving for self-actualization10, whichfocuses on learning new skills, taking on new challenges, and “being all you canbe.”[citation redacted per publisher request]. John and Starr Chapman are perfectexamples of this; their restaurant, Chappy’s Seafood Restaurant, was lost in thehurricane. The couple relocated to Nashville, Tennessee, and in 2006, openedChappy’s on Church Street. Although it was challenging and overwhelming at times,the husband-and-wife team is not only surviving but also thriving after this life-changing experience.Joy Messer, “Survivors of Hurricane Katrina OvercomeAdversity and Open ‘Chappy’s on Church Street,’” July 23, 2008, Associated Content,http://www.associatedcontent.com/article/887343/survivors_of_hurricane_katrina_overcome.html?cat=22 (accessed August 2, 2009).8. Bonds or attachments to other
people and feelings of love andbelonging.
9. Feelings of being respected andappreciated by one’s peers.
10. Focus on learning new skills,taking on new challenges, and“being all you can be.”
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Power Point: Lessons in Selling from the Customer’sPoint of View
Self-Actualization Means Help for Others
Nikki Olyai, president and CEO of Innovision Technologies, recently made asignificant investment for her company and purchased new software andhardware. Her buying philosophy? Nikki looks for a strong value system, trust,commitment, a proactive approach to helping her solve her business problems,and cost-effectiveness. But she expects more from a vendor and businesspartner; she gives extra consideration to vendors who have demonstrated acommitment to community service and development. Nikki believes thatbusinesses and their vendors need to give back to the communities theyserve.Mary Cantando, “How Savvy Women Entrepreneurs Make BuyingDecisions,” Women Entrepreneurs, Inc., January 1, 2005,http://www.perfectbusiness.com/articles/newsarticle.cfm?newsID=948&news=1 (accessed August 1, 2009).
This all comes together at the point of sale, whether you are selling in business-to-consumer (B2C) or business-to-business (B2B) environments. When you understandthe motivation of your customer, you can customize your solution and yourmessage to meet their needs, emotions, and motivations. Consider the HurricaneKatrina example; would you attempt to sell fine jewelry, pitch the benefits of alandscaping service, or suggest a home theater system to someone in New Orleanson August 29, 2005? Probably not. People were focused on their most basic needs atthat time, and none of these products or services would have been appropriate tosell. Although this may seem like an extreme example, it’s a good way to rememberto look at the world through your customer’s eyes, as you’ll see a completelydifferent view. Now that you can see what motivates people to buy, it’s time to learnwho is buying. Although the buying process is similar for B2C and B2B, there aresome distinct differences that can make a difference in the way you sell.
Business-to-Consumer (B2C) Buying
Think back to your visit to the Abercrombie & Fitch store. It’s pretty obvious thatyou are the customer, or in marketing parlance, you are the consumer11, the enduser of the product or service. You might be shopping for yourself or buying a giftfor a family member or a friend. Either way, you (or the person to whom you aregiving the product) are the ultimate consumer, which is what defines B2C buying.
11. The end user of a product orservice.
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So, whether you are buying a cell phone and service at a Verizon store, a musicdownload from iTunes, or a burger and fries at Burger King, you are buying in theB2C arena. Even though you may behave differently than your brother or roommatein terms of your purchasing decisions, you are all described as B2C customersbecause you are the ultimate consumer of the products or services you buy.
Why People Buy: Virtual Purchases
Clothes for your avatar, “bling” for your online profile, or a virtual birthdaycupcake are all reasons to make digital purchases virtually: paying real moneyfor something that exists only online. Facebook, SecondLife.com, andStardolls.com are just a few Web sites that give users the option to buy virtualgoods. Why do people buy things that aren’t even real? For some of the samereasons people buy the real thing: to be able to do more (i.e., increasefunctionality), build relationships, and establish identity.Jeremy Liew, “Why DoPeople Buy Virtual Goods?” Wall Street Journal, February 9, 2009,http://online.wsj.com/article/SB123395867963658435.html (accessed August 1,2009).
Business-to-Business (B2B) Buying
With B2B customers, sometimes referred to as organizational (or institutional)markets12, there are several different types of situations that define needs andpurchasing behavior. Some companies buy products to sell directly to consumers,whereas others purchase products as ingredients or components to produce theirproduct. Still other companies lease products or services, while others serve thepublic, such as government or nonprofit organizations. Each of these differenttypes of companies and organizations has different needs and requirements thatimpact the buying process.Michael R. Solomon, Greg W. Marshall, and Elnora W.Stuart, Marketing: Real People, Real Choices, 5th ed. (Upper Saddle River, NJ: PearsonPrentice Hall, 2008), 179.
Producers
Companies that buy products to make or build a product or service to sell for aprofit are called producers13. For example, in the case of Reebok, the companypurchases components for its athletic shoes from a variety of vendors around theworld. Reebok uses the components to manufacture the shoes and sell them toretailers such as Foot Locker, which in turn, sell the shoes to consumers like you. In
12. Another term for B2B buyingor selling, which means sellingproducts or services to anothercompany rather than sellingdirectly to the ultimateconsumer.
13. A B2B company that purchasesparts, products, or ingredientsfor the production of othergoods or services to sell at aprofit.
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this example, Reebok is engaged in B2B buying as a producer because the companypurchases parts or materials to make shoes and then sells them to othercompanies.Barton A. Weitz, Stephen B. Castleberry, and John F. Tanner, Jr., Selling:Building Partnerships, 7th ed. (New York: McGraw-Hill Irwin, 2009), 86. Reebok is aB2B purchaser but not a B2C seller; the company markets its brand directly to B2Cconsumers to gain recognition and drive consumers to participate in B2C buying atretailers that carry its brand.
Figure 6.4 Types of B2B Buyers
Resellers
Resellers14 purchase finished goods to sell, lease, or rent to B2B or B2C purchasers.In the example above, Foot Locker is a reseller because the company buys finishedproducts from manufacturers such as Reebok, Nike, New Balance, Ryka, and others.In other words, Foot Locker doesn’t manufacture products but rather buys themfrom other companies to sell them. It’s important to note that although Foot Lockerbuys in the B2B arena as a reseller, the company sells in the B2C arena because itsells its products to the ultimate consumer.Michael R. Solomon, Greg W. Marshall,and Elnora W. Stuart, Marketing: Real People, Real Choices, 5th ed. (Upper Saddle River,NJ: Pearson Prentice Hall, 2008), 180. Besides retailers, other types of resellers arewholesalers, brokers, and agents.
Organizations
organizations15 include government bodies (federal, local, and municipal, as wellas the District of Columbia) and nonprofit groups (churches, hospitals, colleges, andcause-related groups like the American Red Cross). The government is a hugeconsumer, using over $1 trillion in goods and services annually.Barton A. Weitz,Stephen B. Castleberry, and John F. Tanner, Jr., Selling: Building Partnerships, 7th ed.(New York: McGraw-Hill Irwin, 2009), 88. In fact, according to the U.S. governmentbudget in 2010, the government outlays are projected to be 24.4 percent of the U.S.gross national product.Office of Management and Budget, “Updated Summary
14. A company that buys finishedgoods, to sell, lease, or rent toother companies or consumers.
15. Federal, local, and municipalgovernment bodies andnonprofit groups such aschurches, schools, AmericanRed Cross, Salvation Army, andothers that purchase productsor services to serve or sell toconstituents.
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Figure 6.5
Nonprofit organizations such asthe Lance Armstrong Foundationare purchasers of products andservices.Lance ArmstrongFoundation, http://www.store-laf.org (accessed August 2, 2009).
Tables, May 2009: Budget of the U.S. Government, Fiscal Year 2010,”http://www.usgovernmentspending.com/us_20th_century_chart.html (accessedAugust 2, 2009). This makes the U.S. government the single largest customer in theworld. In fact, government purchases are so large that when the Obamaadministration decided to replace its fleet of government vehicles in 2009, itpurchased 17,205 cars for a total of $287 million—that’s just one governmentpurchase!Jeremy Korzeniewski, “U.S. Government Buys 17,205 Cars for $287 Million,Ford Represents,” Autoblog Green, http://www.autobloggreen.com/2009/06/11/u-s-government-buys-17-205-new-cars-for-287-million-ford-repr (accessed August 2,2009). As a result of the government being such a huge customer, there areprocesses for prospective vendors to apply to provide products or services to thegovernment. The Web site https://www.fbo.gov provides information about federalbusiness opportunities.Michael R. Solomon, Greg W. Marshall, and Elnora W. Stuart,Marketing: Real People, Real Choices, 5th ed. (Upper Saddle River, NJ: Pearson PrenticeHall, 2008), 181.
Nonprofit organizations such as the Salvation Army, the Susan G. KomenFoundation, the American Cancer Society, churches, schools, shelters, and othersare also B2B purchasers of goods and services. Some may be producers, such as asoup kitchen that buys ingredients for soup and other meals, and some may beresellers, such as the yellow bands for LIVESTRONG, the Lance ArmstrongFoundation.Lance Armstrong Foundation, http://www.livestrong.com (accessedAugust 2, 2009).
Big Differences
B2C and B2B purchasers are different for severalreasons. The most important differentiator is thatconsumers purchase for their own consumption (or theconsumption of their household or friends), whereasB2B customers purchase to produce or resell theproduct to a company or the ultimate consumer. Thereare also several other key differences between B2C andB2B buyers. Generally, B2C buying is based—for themost part—on impulse, low-risk decisions for productsand services that are readily accessible. Whether youshop online, in a store, or at a direct selling party, yourbuying decisions impact only yourself and your familyand do not put you at risk. Although you may makesome significant buying decisions such as a house or acar, your options are easily accessible (go online, go to the mall or store), and yourdecisions don’t put you in danger of losing anything—except, of course, if you spendmoney you don’t have.
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Table 6.1 Comparison of B2C and B2B Buying Decisions
B2C Buying Decision B2B Buying Decision
Impulsive Methodical
Simple Complex
May or may not be budgeted Budgeted
Low risk High risk
Individual decisionCoordinated decision with buy-in and approval frommany people
May or may not include someresearch
Analytical including cost-benefit analysis
Source: Data from Randy Shattuck, “Understand the B2B Buying Cycle,”http://www.internetviz-newsletters.com/PSJ/e_article001037852.cfm (accessedAugust 1, 2009).
However, in a B2B buying decision, the buying decision is complex, and there issignificant risk because a single decision can affect the quality of a product orservice offered by a company to its customers, safety of consumers, or evenprofitability of the company. If a B2B buying decision is the wrong decision, theperson or people who made the decision might suffer the consequences, includingthe loss of his job.Randy Shattuck, “Understand the B2B Buying Cycle,”http://www.internetviz-newsletters.com/PSJ/e_article001037852.cfm (accessedAugust 1, 2009).
Size of Purchases
Because B2C buyers are purchasing only for their consumption or for theconsumption of a limited number of people, the size of the purchases is relativelysmall. By contrast, B2B purchases are significant because the companies arepurchasing to sell to other companies or to many consumers. Consider thisdifference: you might buy ten pairs of jeans in a year, but Nordstrom buys hundredsof thousands of pairs of jeans to stock in their inventory.Michael R. Solomon, GregW. Marshall, and Elnora W. Stuart, Marketing: Real People, Real Choices, 5th ed. (UpperSaddle River, NJ: Pearson Prentice Hall, 2008), 177. The size of B2B purchases isalways significantly larger than B2C purchases simply because a company is buyingfor more than one consumer.
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Figure 6.6
The decision about whichproducts are offered in a grocerystore may involve several people.
© 2010 JupiterimagesCorporation
Multiple Buyers
If you think it’s difficult to keep everyone in your apartment happy with the foodpurchases you make at the supermarket, that’s easy compared to the number ofpeople involved in a B2B purchasing decision. In most B2B transactions, there aremultiple decision makers involved in each purchase. Think about your trip to thesupermarket from the B2B buyer’s perspective. The decision about which productsto stock on the shelves was ultimately made by someone who holds the title of“buyer” in the company. However, she could not decide unilaterally what to carryin the bottled water section. She has to understand which bottled water hercustomers want, consult with the general merchandise manager, who is responsiblefor the shelf space, and the vice president of merchandising, who oversees allproduct choices. She may even need to make a presentation to a buying committeebefore she makes the decision to carry another flavor of Vitaminwater. She willneed to get approval for the money to invest in the inventory and shelf space.Depending on the organization and the size and impact of the decision, severalpeople from several different departments may be involved in a B2B buyingdecision.
Number of Customers
There are over three hundred million people who live inthe United States and approximately a hundred millionhouseholds. However, there are less that half a millionbusinesses and other organizations.Michael R. Solomon,Greg W. Marshall, and Elnora W. Stuart, Marketing: RealPeople, Real Choices, 5th ed. (Upper Saddle River, NJ:Pearson Prentice Hall, 2008), 177. Because B2B buyersare making decisions that may ultimately impact thesale of a product or service to millions of consumers,there are naturally fewer businesses. Consider the factthat according to the United States Census Bureau,there are only 7,569 hospitals in the country, yet thereare over 110 million visits to emergency roomsannually.United States Census Bureau,http://www.census.gov/Press-Release/www/releases/archives/facts_for_features_special_editions/004491.html (accessed August 2, 2009).
Geographic Concentration
Since there are many fewer businesses and organizations compared to the numberof ultimate consumers, it makes sense that there is a geographic concentration of
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B2B customers. For example, the fashion industry is primarily located in New York,filmmaking in Los Angeles, and technology in Silicon Valley. B2B buyers candetermine where they want to be located based on resource or on access and caneven choose where to build warehouses or call centers based on costs,transportation, and availability of labor.Michael R. Solomon, Greg W. Marshall, andElnora W. Stuart, Marketing: Real People, Real Choices, 5th ed. (Upper Saddle River, NJ:Pearson Prentice Hall, 2008), 178.
Figure 6.7 Comparison of B2C and B2B Buyers
Business-to-Business Means Person-to-Person
Although B2C buying behavior is very complicated, B2B buying behavior is evenmore complex. The fact is, although it’s called business-to-business buying, theterm actually describes people doing business with people. A business never makes abuying decision; the decision is made by people who work for the company. So B2Bbuying decisions are subject to the same behaviors as B2C buying decisions, but on amore challenging level because B2B buying decisions usually include multipledecision makers, an extensive evaluation process, extended analysis, and theyrepresent a high risk on the part of the decision makers.Kae Groshong Wagner,“The B2B Buying Process,” http://www.internetviz-newsletters.com/PSJ/e_article001037852.cfm (accessed August 2, 2009).
While many B2B buying decisions are made by an individual decision maker, manyare made by a group of people working together, usually from differentdepartments. When this is the case, the group is called a buying center16, all thepeople in a group who are involved in the buying decision.Michael R. Solomon, GregW. Marshall, and Elnora W. Stuart, Marketing: Real People, Real Choices, 5th ed. (UpperSaddle River, NJ: Pearson Prentice Hall, 2008), 184. For example, hospitals usebuying centers to make decisions on new equipment, a retail company might use a
16. Cross-functional team ofpeople who make buyingdecisions on behalf of thecompany or organization.
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buying center to determine which point-of-sale register system to purchase. Thebuying center usually includes people from the organization who have expertise indifferent areas, and each may play a different role in the buying decision. Followingare some roles that may be included in the buying center.
Users
The people in the B2B buying process may include some or all of the following roles.Users17 are the people who are actually using the product or service. In the case of acompany purchasing a telecommunications system, the users are all employees ofthe company because each uses the telephone, Internet, and other communicationstechnologies. But in the case of a company purchasing a security system, only theemployees in the security department would be users of the product; otheremployees would simply enjoy the benefits of the product without actually using it.Because the users’ satisfaction is so important, many companies involve users atvarious points throughout the buying process, including gathering input,participating in product demonstrations, or even using the product as a test.
Initiators and Influencers
Initiators18 are those people in the company who start the purchasing process for aparticular product or service.Barton A. Weitz, Stephen B. Castleberry, and John F.Tanner, Jr., Selling: Building Partnerships, 7th ed. (New York: McGraw-Hill Irwin,2009), 97. For example, the e-commerce manager in the marketing department maybegin the process of seeking a new technology provider for e-mail and socialnetworking services on the company’s Web site. However, he may not be the finaldecision maker. There may be several departments involved in the purchasingdecision including marketing, IT, and customer service, just to name a few. The e-commerce manager will most likely be a user and will take part in the buyingprocess. In fact, he may even be an influencer19 in the final buying decision becausehe can lend his expertise to the team of people who will be making the finaldecision. He may compare the offerings from competitive companies, do acompetitive cost analysis, and even conduct a cost-benefit analysis to determinewhich product will provide the most benefit for the least amount of cost. He mighthave a preference of which vendor to choose as a result of this information and hisknowledge of the different companies in the industry. His influence may be quitesignificant as to what choice the company makes for the purchase. There may beother people in the organization who are also influencers, such as the IT manager,customer service manager, and others.
17. People in a company who usethe product or service but maynot be the decision maker inthe buying process.
18. Person who starts the buyingprocess in a company but whomay not be the decision makerin the buying process.
19. A person who has a role andperhaps some authority in thepurchasing decision at acompany but is not the soledecision maker.
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Decision Makers
At the end of the day, it is the decision maker20 or decision makers who will makethe final purchasing decision. Decision makers could be anyone who holds theresponsibility or accountability for making buying decisions for the company. Inthe case of the e-mail and social networking technology purchase, depending on thecompany, the decision maker might be the CEO, the head of the marketingdepartment, or even a committee of people from marketing, IT, and customerservice. A smart decision maker involves the users and influencers in her decision-making process to make the best choice. An investment in technology will not onlybe expensive, but will last for years; once a company makes a commitment tointegrate their systems with a technology company, it is not practical to makefrequent changes. The decision making process in B2B can take days, weeks,months, or even years to make, depending on the company and the product orservice being purchased.
Finding the “Power Level”
When you are selling in a B2B environment, you may not always have access to theultimate decision maker. But building a relationship with the initiator, influencers,and users can be just as important and effective as meeting with the decisionmaker. However, you should always be aware of the “power level21,” or exactly thelevel in the organization that is making the buying decision. Sometimes,salespeople don’t get to the power level, but instead stop at one or two levels belowthat critical level where the purchasing decision is being made. If the vice presidentof human resources is making the decision as to which vendor to choose for thecompany’s training programs, it’s important to build a relationship with her.Having a relationship with the director of training is critical, but a successfulsalesperson wouldn’t stop there; he would work to secure a relationship at thepower level, which is the vice president. This video discusses the power level and itsimportance to success in selling.
Video Clip
Finding the Power Level
Learn how to find the power level within an organization.
http://www.sellingpower.com/content/video/?date=1/8/2009
20. The person or people who areresponsible for making thefinal purchasing decision at acompany.
21. The level in a company ororganization at which thebuying decision is made.
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Types of B2B Buying Situations
There’s still more you can learn about the B2B buying environment. Althoughcompanies are so different from each other (some are large multinationalcorporations while others are one-person operations) and the types of products andservices being purchased are so different (everything from business cards to officebuildings), it might seem difficult to know how to apply the concepts covered toevery buying situation. One way is to understand the different types of buyingsituations that face a B2B buyer.
New-Task Buy
If a company is moving its headquarters to a new building that does not comeequipped with office furniture, the company will need to acquire furniture for all ofits employees. This is a new purchase for the company, which would classify it as anew-task buy22.Gerald L. Manning, Barry L. Reece, and Michael Ahearne, SellingToday: Creating Customer Value, 11th ed. (Upper Saddle River, NJ: Pearson PrenticeHall, 2010), 163. When a customer is contemplating a new-task buy, it is an excellentopportunity to use your consultative selling skills to bring information to yourcustomer to help her make the best possible decision.
Straight Rebuy
What if your customer is already purchasing the product or service regularly?Although he may currently be purchasing the product from you, he already knowsabout the product or service, how to use it, and how much he is currently paying forit. This is called a straight rebuy23,Gerald L. Manning, Barry L. Reece, and MichaelAhearne, Selling Today: Creating Customer Value, 11th ed. (Upper Saddle River, NJ:Pearson Prentice Hall, 2010), 163. a routine repurchase of a product or service.Usually, straight rebuys are consumable products or supplies such as officesupplies, maintenance supplies, or parts. This is an opportunity for you to shine,whether the customer is currently purchasing from you or not. When purchases areon “auto pilot,” sometimes the salesperson gets lazy, takes the business for granted,and doesn’t go the extra mile to suggest something new or better. If a prospectivecustomer is already buying from someone else, you have the opportunity to win herover by suggesting a better or more efficient product, a different pack size ormethod of replenishment, or other ideas that will help the customer save time ormoney or increase quality. For straight rebuys, it is often price that gets thecustomer’s attention, but it is service (or lack of it) that makes the customer switchproviders.
22. A purchase made by a companyfor the first time.
23. A routine repurchase of aproduct or service.
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Figure 6.8
The September 2009 issue ofVanity Fair magazine is anexample of a modified rebuybecause the normal print orderwas adjusted to print twodifferent covers.“Vanity Fair’sTwo September 2009 Covers:Michael Jackson, Farrah FawcettSplit Cover,” Huffington Post,August 3, 2009,http://www.huffingtonpost.com/2009/08/03/vanity-fairs-two-septembe_n_249809.html(accessed February 20, 2010).
Modified Rebuy
Sometimes, your customer may already be purchasing the product but wants tochange the specifications; this is called a modified rebuy24.Gerald L. Manning,Barry L. Reece, and Michael Ahearne, Selling Today: Creating Customer Value, 11th ed.(Upper Saddle River, NJ: Pearson Prentice Hall, 2010), 163. For example, when themagazine Vanity Fair did a split run of their magazine cover for their September2009 issue, they printed half of the copies with Michael Jackson on the cover andhalf with Farrah Fawcett.Lorena Bias, “Fawcett, Jackson Get ‘Fair’ Magazine Play,”USA Today, August 3, 2009, life 1. Although they print the magazine monthly, theymodified the printing specifications for that issue. Therefore, the sales rep from theprinter sold the September 2009 print run as a modified rebuy. Selling to acustomer who is purchasing a modified rebuy is an excellent opportunity todemonstrate your flexibility and creativity. Many times, customers have an idea inmind for a modification, but if you can bring them ideas and insights that will helpthem increase their business profitably, you will have the upper hand in securingthe buy.
Strategic Alliance
Although most B2B selling depends on relationships,some selling situations go above and beyond thetraditional relationship between a salesperson and thecustomer. Some relationships go to the next level andactually create a partnership that puts both parties atrisk and provides opportunities for all parties to gain;this is called a strategic alliance25. The relationshipbetween Yahoo! and Microsoft is an example of astrategic alliance. The two companies finally decided tojoin forces in July 2009 in an effort to leverage resourcesas a stronger competitor to industry leader Google. Aspart of the relationship, Microsoft will power Yahoo!’ssearch with its new engine called Bing; Yahoo! willreceive 88 percent of the search-generated advertisingrevenues from Bing.“Yahoo-Microsoft Deal,” New YorkTimes, July 30, 2009, http://topics.nytimes.com/top/news/business/companies/yahoo_inc/yahoo-microsoft-deal/index.html (accessed August 3, 2009). BothMicrosoft and Yahoo! have “skin in the game,” whichmeans that each party has something at risk and muchto gain. The strategic alliance represents a way for bothcompanies to prosper in the Internet search business.Separately, each represents less than one-fifth of thesearches done in the United States. Together, their market share is 28 percent, still
24. A product or service that isalready being purchased, butthe specifications are changed.
25. A business partnership inwhich all parties havesomething at risk and havesomething to gain.
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a far cry from industry-leading Google at 65 percent.Patricia Resende, “MicrosoftKeeps Watchful Eye on Yahoo’s Earnings,” Yahoo! Tech, July 20, 2009,http://tech.yahoo.com/news/nf/20090720/tc_nf/67859 (accessed August 3, 2009).Despite spending billions, neither company has been successful overtaking Googlealone; the strategic alliance gives these companies a chance to compete.“Yahoo-Microsoft Deal,” New York Times, July 30, 2009, http://topics.nytimes.com/top/news/business/companies/yahoo_inc/yahoo-microsoft-deal/index.html (accessedAugust 3, 2009).
Figure 6.9
Bing, the search engine created by Microsoft, is now also the search engine used on Yahoo!
Who Makes the Buying Decision?
In many companies, there is a function called buyer, purchasing manager, materialsmanager, or procurement manager. These are the people who are responsible formaking buying products, services, and supplies for the company or for thecompany’s customers. In most cases, they are the decision makers for purchasingdecisions.
Because most purchasing decisions in a company have a significant impact on theusers and on the profitability of the company, some companies create cross-functional teams called a buying center. These people work together to makeimportant buying decisions for the company or organization. For example, manycolleges and universities have a buying center that makes decisions that impact allusers in the school such as a new e-mail system, classroom, or dormitorysupplies.Michael R. Solomon, Consumer Behavior: Buying, Having, and Being, 8th ed.(Upper Saddle River, NJ: Pearson Prentice Hall, 2009), 184.
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KEY TAKEAWAYS
• Customer behavior is a science, not an art, driven by specific needs thatdrive motivation.
• A consumer who purchases in a B2C environment is the end user of theproduct or service.
• A B2B purchaser, also called an organizational or institutionalpurchaser, buys a product or service to sell to another company or tothe ultimate consumer.
• B2B purchasers may be producers, resellers, or organizations.• B2B buys are characterized by being methodical, complex, budgeted,
high risk, analytical, and coordinated across different parts of thecompany.
• B2B purchases are larger than B2C purchases, include multiple buyers,involve a smaller number of customers, and are geographicallyconcentrated.
• Maslow’s hierarchy of needs describes how people are motivatedbased on the level of needs that are being satisfied. Understanding acustomer’s motivation based on the hierarchy can provide valuableinsights for selling.
• There can be several types of people involved in a B2B purchasingdecision, including users, initiators, influencers, and decision makers.
• An individual such as a buyer, purchasing manager, or materialsmanager might make buying decisions. Some companies use a buyingcenter, a cross-functional team that makes buying decisions on behalf ofthe company.
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EXERCISES
1. Visit at least two different retailers. Determine whether each has atransition zone at the front of the store. Discuss the differences betweenthe shopping experiences. Which one is more conducive to buying?
2. Identify one B2C seller and one B2B seller. Describe at least threedifferences between their buyers.
3. Identify one B2B company or organization that fits each of thefollowing descriptions and describe why each belongs in thecategory:
◦ Producer◦ Reseller◦ Government◦ Nonprofit organization
4. Consider each of the following products and services. Evaluateeach one based on utilitarian need and hedonic need:
◦ Trip to Las Vegas◦ Subscription to Rolling Stone magazine◦ Internet service◦ College education◦ iPod Touch
5. Jessica wants to celebrate her twenty-first birthday in style. She boughta new outfit, had her nails done, and went to the tanning salon. She isnot only having a party for one hundred of her closest friends, but she isgoing to broadcast it live on Facebook and Twitter while the party isgoing on. Which need on Maslow’s hierarchy is Jessica striving tosatisfy?
6. Assume you are a salesperson for Chevrolet and you are among the firstto sell the new electric-powered car called Volt. Which need on Maslow’shierarchy is the car designed to meet?
7. Imagine you work in the communications department of your school.Homecoming is just a few weeks away, and you are in charge of gettingthe banner for the parking lot, which will direct alumni where to park.This year, the directions to the parking are different than they were onthe banner last year. Identify the type of purchase a new banner for theparking lot is and explain.
8. Assume you are selling printers and copiers to a group of clinics. Thebuying center includes people from purchasing, information technology,
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administrative assistants, doctors, and nurses. Discuss the role that eachmight take on as part of the buying center and the impact they mayhave on the final buying decision. How might you interact with eachone?
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6.2 How the Buying Process Works
LEARNING OBJECTIVES
1. List the steps in the buying process and describe how and why theprocess is evolving.
2. Understand the role of emotions in the buying decision.3. Learn how to use FAB for effective selling.
For years, the buying process was considered to be linear; scholars and researcherswho closely monitored buying behavior identified several steps that the B2Bcustomer goes through before she makes a purchase. It’s helpful to understandthese steps to appreciate the changes that are taking place, even as you read this.
The Traditional View of the Seven Steps of the B2B BuyingProcess
You are probably familiar with buying as a consumer. But did you ever think abouthow Aéropostale decides what products will be in their stores for the spring season,how a restaurant determines which beverages it will offer, or how Hewlett-Packard(HP) identifies which parts it will use to manufacture its printers? The buyingprocess outlines the steps that the B2B customer goes through when he is making apurchasing decision on behalf of the company. This process applies whether thebuying decision is being made by an individual or by a buying center.
1. Recognizing the need. The buyer realizes there is a need for the product orservice.Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,”http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). In the B2Benvironment, this might occur because of an internal need (e.g., the company needsmore office space) or because of a customer need (e.g., green tea is becoming morepopular, and so we want to offer it on our menu). This is the ideal opportunity foryou to learn about your customers’ needs, although it may be difficult to knowexactly when a customer or prospective customer is beginning this step. That’s whyit’s important to engage your customer in dialogue to understand their current andfuture needs. Sometimes, you can help your customer see an opportunity that hedidn’t realize.
2. Defining the need. This step usually involves users as well as initiators to putmore definition around the type of product or service that will help meet the
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need.Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,”http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). For example, in thecase of office space, the head of facilities would ask the head of human resourcesabout the types of new positions that will be needed and the type of workspace eachrequires. He might also ask for insight from each hiring manager or departmenthead in the company, such as the head of operations, marketing, finance, and otherareas. This will help him more fully understand the general type of product orservice that is needed. Salespeople can play a role in this step of the buying processby sharing information and insights from other customers, without divulging anyconfidential information.
3. Developing the specifications. This is the step at which the exact needs areoutlined.Barton A. Weitz, Stephen B. Castleberry, and John F. Tanner, Jr., Selling:Building Partnerships, 7th ed. (New York: McGraw-Hill Irwin, 2009), 93. For example,if Target identified the need to create its own brand of DVD player, the appropriatepeople in the company would determine the exact specifications of the product:what functions it will have, how large it will be, what materials it will be made of,how many colors will be offered, and all other attributes of the product. When asalesperson has a good relationship with a customer, the buyer might ask thesalesperson for insights and advice on different features, functionality, andproduction costs to finalize the product or service specifications.
4. Searching for appropriate suppliers. This step is focused on researchingpotential suppliers. This research can be conducted online by doing a Google searchfor suppliers of the desired product or service.Ron Brauner, “B2B Buying Process: 8Stages of the Business Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessedAugust 1, 2009). Trade associations are also an excellent source as many provideunbiased evaluations of suppliers; for example, Forrester Research publishes areport on Web site analytic tools.
Link
Forrester Research Reports on Web Site Analytics Tools
http://www.forrester.com/rb/Research/web_analytics_buyers_guide/q/id/53043/t/2
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And industry trade shows can be an excellent source of information aboutprospective suppliers. One of the best ways to identify suppliers is by referrals; useyour business network, including LinkedIn, to get feedback about reliable suppliersthat might be able to meet your needs.
5. Requesting proposals. This is when the buyer or buying center develops aformal request for proposal26, often called an RFP, and she identifies severalpotential vendors that could produce the product or service.Ron Brauner, “B2BBuying Process: 8 Stages of the Business Sales Funnel,”http://www.ronbrauner.com/?p=68 (accessed August 1, 2009). For example, if HomeDepot decided that it wanted to upgrade its bags, the buyer would have determinedthe specification, quantity, shipping points, usage, and other requirements (e.g.,being environmentally friendly), and put the information into a formal documentthat is sent to several bag manufacturers along with questions about the history ofthe company, key customers, locations, manufacturing capacity, turnaround time,and other relevant information. Each manufacturer would have the opportunity torespond to the RFP with a formal proposal27, which means that each companywould provide information about their company, capabilities, delivery, and pricingto manufacture the bags. This is an opportunity for a salesperson to respond with acomplete proposal that addresses the customer’s needs and concerns. See thesample RFP template for a nonprofit organization below.
Link
RFP Template for a Nonprofit Organization
http://www.npguides.org/guide/grant1.htm
6. Evaluating proposals. After the proposals are submitted, the buyer or buyingcenter reviews each one and determines whether the company would be a good fitfor the project. At this point, the number of potential vendor choices is narrowed toa select few. Usually, salespeople from each of the chosen companies are invited tomeet with the buyer or buying center to discuss the proposal, capabilities, andpricing. Negotiation for pricing, quality, timing, service, and other attributes mayalso take place during this step.Ron Brauner, “B2B Buying Process: 8 Stages of theBusiness Sales Funnel,” http://www.ronbrauner.com/?p=68 (accessed August 1,2009). This is the step where a salesperson may need to overcome objections, or thereasons why the customer may not want to choose her as the company of
26. A formal request from possiblesuppliers to provide or create aspecific product or service.
27. A written document thatoutlines a company’scapabilities, delivery, andpricing in relation to a specificproduct or service.
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choice.Ron Brauner, “B2B Buying Process: 8 Stages of the Business Sales Funnel,”http://www.ronbrauner.com/?p=68 (accessed August 1, 2009).
7. Making the buying decision. The buyer or buying center chooses one (or thenecessary number) of companies to execute the project, finalizes details, negotiatesall aspects of the arrangement, and signs a contract. This step requiresperseverance and attention to detail on the part of the salesperson. Once thedecision is made, the real business of selling begins: delivering the product orservice as agreed upon and building the relationship.
8. Postpurchase evaluation. Throughout the buying process, the buyer is providedall the good news: how the new product or service will solve her company’sproblems, increase demand, reduce costs, or improve profitability. It is thepostpurchase evaluation that tells the tale. Did the product or service perform aspromised? Was the delivery and installation done correctly and on time? Are thebusiness results in line with expectations? Is the relationship growing? Do thesalesperson and his company really care about the performance of the buyer’scompany? Does the salesperson add value to the buyer’s company? This is wherethe rubber meets the road; it presents an opportunity for the salesperson tocommunicate, anticipate, and solve any problems that may have arisen.Michael R.Solomon, Greg W. Marshall, and Elnora W. Stuart, Marketing: Real People, Real Choices,5th ed. (Upper Saddle River, NJ: Pearson Prentice Hall, 2008), 190.
The process makes sense and is a flow of systematic steps that leads a B2B buyerthrough a logical buying process. But there are two flaws in this thinking thatsignificantly impact the buying process and, as a result, the selling process: (1) theInternet changes everything and (2) emotions dominate B2B buying.Geoffrey James,“Is Your Sales Process Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009).,Bryan Eisenberg, “Buying Is Not aRational Decision,” ClickZ, November 26, 2001, http://www.clickz.com/927221(accessed August 1, 2009).
The Internet Changes Everything
It used to be that B2B buyers relied on salespeople to get information,demonstrations, and cost about products and services. Salespeople sold, and buyersbought; the world was a simpler place.
Today, B2B buyers are doing the work of two or even three employees becausethere are fewer people working at companies due to cutbacks and restructuring.The fact is, buyers don’t have the time to meet with salespeople like they used to.And the Internet has been a game changer. Buyers can not only research product
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and supplier options online, but they can also see product specifications, viewdemonstration videos, participate in online forums, get real-time recommendationsand feedback from users on social networks, and basically be smarter than anysalesperson before he even calls for an appointment.Geoffrey James, “Is Your SalesProcess Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009). The power has shifted from sellers tobuyers. In fact, the Internet has had such a profound effect on how people makepurchasing decisions that the Wall Street Journal has coined a new term: “new infoshopper.” These are people who can’t buy anything without getting informationonline first. What’s even more important to note is the fact that 92 percent of newinfo shoppers have more confidence in the information they get online than froman ad, salesperson, or other company source.Mark Penn, “New Info Shoppers,”January 8, 2009, Wall Street Journal, http://online.wsj.com/article/SB123144483005365353.html?mod=dist_smartbrief# (accessed August 1, 2009).
So what’s a salesperson to do? Stop, listen, and help your customer make the bestdecision for her business, even if it means that she doesn’t buy your product.Despite the importance of the Internet in providing information throughout thebuying process, B2B buyers still gather insight from a variety of sources thatinclude salespeople. Successful salespeople are those that truly focus on the buyer’sneeds, which may mean giving up the sale and bringing valuable feedback to yourcompany to change the product, service, or other options that are reasons whycustomers might not buy from you. The new world order requires everyone torethink the conventional wisdom. Selling used to be something you “do to” acustomer; now it’s something you “do for” a customer.Geoffrey James, “Is YourSales Process Obsolete?” BNET, March 30, 2007, http://blogs.bnet.com/salesmachine/?p=30 (accessed August 1, 2009). The salespeople who win are theones who listen in person, on the phone, and online, then make therecommendation that is in the customer’s best interest.
Information is no longer the exclusive domain of the salesperson. But greatsalespeople bring value to their customers with ideas, insights, knowledge, andpersonal commitment that can’t be duplicated on a Web site, online forum, or evenon a social network. And the role of the Internet in B2B buying decisions ischanging quickly.
Sales 2.0 has changed the way people seek, receive, and interact online. TheInternet used to be only an information source, a place to search Web sites forinformation. But static Web sites have given way to not only information gathering,but to problem solving. Crowdsourcing28 occurs when a company takes a job that istraditionally done by an employee and issues an “open call,” usually online, topeople all over the world to solve the problem. This is a new way for businesses andindividuals to leverage the Internet in an efficient and effective
28. Situation in which a companytakes a job that is normallyperformed by an employee andputs out an “open call,” usuallyon the Internet, for people allover the world to work on it.
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way.BrightSightGroup, “Jeff Howe: Crowdsourcing,” video, July 6, 2008,http://www.youtube.com/watch?v=F0-UtNg3ots (accessed August 3, 2009).Crowdsourcing uses the wisdom of the crowd in a virtual way to make informationand solutions readily available to everyone. This video describes howcrowdsourcing has changed the photography business forever.
Video Clip
Crowdsourcing
(click to see video)
Learn how to make the crowd work for you.
Source: Jeff Howe
Salespeople can embrace crowdsourcing and bring the power of the crowd to solveany customer problem. Facebook, iPhone apps, and YouTube are just threeexamples of crowdsourcing. Consider this example of the power of the crowd: Appleoffered more than 65,000 apps for its iPhone in less than two years, and the numberis projected to rise to 300,000 in 2010.Will Park, “Apple Bans Hundreds ofSpammer’s iPhone Apps,” Into Mobile, August 3, 2009, http://www.intomobile.com/2009/08/03/apple-bans-hundreds-of-spammers-iphone-apps.html (accessed August3, 2009).,Daniel Ionescu, “Android Market Hits 20,000 Apps Milestone,” PC World,December 16, 2009, http://www.pcworld.com/article/184808/android_market_hits_20000_apps_milestone.html (accessed December 20, 2009).
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Power Selling: Lessons in Selling from Successful Brands
What’s Next? Ask the Crowd
How do content companies know what people will want to read about in sixmonths? How do retailers determine what color will be hot next season? Howwill car companies know what defines luxury next year?
Trendwatching.com, a global trend service, uses a team of global network ofbusiness and marketing-savvy “spotters” (a.k.a. the crowd) in 120 countries togather data, observe consumers, and talk to the people who are innovators andtrendsetters to identify what’s next. Trendwatching.com offers a free version ofits basic trend reports on its Web site (http://trendwatching.com), but also sellspremium and customized trend information to all types of companies such aretailers, media companies, manufacturers, and others.Trendwatching.com,http://trendwatching.com (accessed August 9, 2009).
The use of technology in B2B selling, especially social networking, will continue toexplode as digital natives29 (people, probably like you, who are under the age of 27)move into the workplace and meet the digital immigrants30, Generation X andbaby boomers who accept technology, but developed their online habits during adifferent time. Processes, behaviors, communication, and decisions will occurdifferently in the future.
Video Clip
The B2B Buying Process
What will it be like in the future?
http://www.enquiro.com/b2bresearch
29. People who grew up withinteractive technology.
30. People who did not grow upwith interactive technologybut have adopted it.
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Emotions Dominate B2B Buying
Whether you look at the traditional buying process or the role the Internet plays inproviding information, it appears that the B2B buying process is logical andrational, but appearances can be deceiving. Despite the implication and belief thatcompanies make purchasing decisions based on facts, it’s a good idea to rememberone of the key tenets of B2B buying mentioned earlier: business-to-business meansperson-to-person. That means that although a B2B buyer is making a decision onbehalf of her company, she still behaves like a consumer and is subject to emotionsand feelings. “People rationalize buying decisions based on facts, but they makebuying decisions based on feeling,” according to Bryan Eisenberg fromClickZ.com.Bryan Eisenberg, “Buying Is Not a Rational Decision,” ClickZ, November26, 2001, http://www.clickz.com/927221 (accessed August 1, 2009).
Fear and Trust
You learned in Chapter 3 "The Power of Building Relationships: Putting AdaptiveSelling to Work" how important trust is in a relationship. People won’t buy fromsomeone they don’t trust, which is why some salespeople are more successful thanothers; they work to establish and develop trust with the customer. People buywhen they feel comfortable with the product and the salesperson and when theybelieve it is the best decision they can make. They want to do business withsomeone who understands all their needs, not just the needs of the product orservice. And because the B2B purchasing process usually includes multiple people,it means that the salesperson needs to develop a relationship and establish trustwith as many people involved in the purchasing process as possible.
Although trust is a positive emotion that can influence a sale, an even strongeremotion in B2B buying is fear. B2B buyers have several fears, not the least of whichis being taken for a fool. Many executives have had the experience of being told onething by a salesperson only to learn the hard way that what he said just wasn’t true.“People are afraid of being sold,” according to Tom Hopkins, author of How to Masterthe Art of Selling.“Fear of Buying,” Selling Power Sales Management eNewsletter,August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed March 16, 2010). The best way to overcome this fear isto demonstrate that you are trustworthy. That means something as simple asreturning a phone call when you say you will, or following up with information aspromised. Even the language that you use can signal trust. For example, “initialinvestment” is a better term than “down payment,” “fee” is more customer-friendly than “commission,” “agreement” says something different than “contract,”and “can’t” sounds more negative than “would you consider.” Understand yourcustomer’s fear of buying and replace it with comfort, trust, and confidence—in
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you.“Fear of Buying,” Selling Power, August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010).
Power Player: Lessons in Selling from SuccessfulSalespeople
Fear as an Opportunity
Norm Brodsky is the owner of an archive-retrieval business called CitiStorage.He is a master salesperson because he is an astute listener and understands howto “listen between the lines” to pick up on customers’ fears. One day he wasshowing a prospective customer through his facility when she saw all the boxesand said, “Gee, aren’t you afraid of having a fire in this place?” Norm was notconcerned at all because he already had backup coverage. But he realized thatshe was afraid of a fire so instead of simply saying that he was not concerned,he took the opportunity to address and respect her fear, not gloss over it. Heresponded by saying, “Yes, certainly, I’ve thought about the danger of a fire,and let me show you what we’ve done about it.”Norm Brodsky, “Listen andEarn,” Inc., March 1, 1997, http://www.inc.com/magazine/19980301/878.html(accessed August 9, 2009). He used the opportunity to put her fear to rest, evenbefore his sales presentation.
Some consumer products such as virus protection, security systems, or insurance,appeal to the emotion of fear; consumers balance the assurance of owning it withthe pain of acquiring it. (Let’s face it: It’s more fun to buy a new PC than to buy virusprotection.) However, in the B2B buying process, the buyer is not the person whoexperiences the benefits of the product or service she purchased.“Beyond the B2BBuying Funnel: Exciting New Research About How Companies Make ComplexPurchases,” Marketo, April 22, 2009, http://blog.marketo.com/blog/2009/04/beyond-the-b2b-buying-funnel-exciting-new-research- about-how-companies-make-complex-purchases.html (accessed August 1, 2009). The fact is if the productor service doesn’t perform as expected or doesn’t generate the desired results, thedecision maker could put their job in jeopardy.“Fear of Buying,” Selling Power,August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010). “B2B buying is all about minimizing fearby minimizing risk,” according to a recent study by Marketo, a B2B marketingcompany.“Beyond the B2B Buying Funnel: Exciting New Research About HowCompanies Make Complex Purchases,” Marketo, April 22, 2009,http://blog.marketo.com/blog/2009/04/beyond-the-b2b-buying-funnel-exciting-
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new-research- about-how-companies-make-complex-purchases.html (accessedAugust 1, 2009). There are actually two kinds of risk: organizational risk31 andpersonal risk32. Most salespeople address the organizational risk by discussing therational aspects of the product or service with information such as, “This serveraccommodates more than five times as much traffic as your current server.”However, it is the personal risk, which is usually not articulated, that has asignificant impact on the buying decision. This is especially true today given thefocus on personal accountability, budgets, and performance. Imagine being thebuyer at a fashion boutique that bought too many plaid skirts and has to request abudget for markdowns, or the decision maker who bought the computer system topower the United States’ government car rebate program, Cash for Clunkers, whichwas delayed for over three weeks because the system crashed.“Cash for ClunkersLaunch Postponed Due to Computer Crash,” U.S. News and World Report, July 24, 2009,http://usnews.rankingsandreviews.com/cars-trucks/daily-news/090724-Breaking-News-Cash-for-Clunkers-Launch-Postponed-by-Computer-Crash (accessed August 4,2009). Some purchasing decisions at certain companies have been so bad thatpeople have been fired as a result. Every B2B purchaser thinks about nightmareslike this, so she is naturally risk-averse. The best approach in these instances is forthe salesperson to reassure her that you realize how important it is for her to lookgood to her boss and throughout her organization as a result of the decision andshow her exactly how you will help her do that.“Fear of Buying,” Selling Power,August 18, 2003, http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessed June 21, 2010).
Fear is a strong motivator in a B2B buying decision, and it can’t simply be addressedin one meeting or conversation. Successful salespeople are aware of it in eachcontact and use every opportunity to demonstrate trustworthiness. “It’s how youhandle the little things that show customers how you’ll handle the big ones,” saysTom Hopkins.“Fear of Buying,” Selling Power, August 18, 2003,http://www.sellingpower.com/content/newsletter/issue.php?pc=296 (accessedJune 21, 2010). It’s best to look at the situation from your customer’s vantage point;you’ll see more clearly how you can deliver value.Bryan Eisenberg, “Buying Is Not aRational Decision,” ClickZ, November 26, 2001, http://www.clickz.com/927221(accessed August 1, 2009).
The Evolving Buying and Selling Processes
The framework for the buying and selling processes has been in place for manyyears. The buying process changes literally every day and has dramatic impact onthe selling process. As a result, the “new” processes are not yet clearly defined. Onething is for certain; the processes are no longer organized, controllable functions.“Linear is so twentieth century,” according to Michael R. Solomon, author ofConsumerspace: Conquering Marketing Strategies for a Branded World.Michael R.
31. Potential exposure, hazard, ordanger for a company.
32. Potential exposure, hazard, ordanger for a person, especiallythe potential of losing his job.
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Solomon, Conquering Consumerspace: Marketing Strategies for a Branded World (NewYork: AMACOM, 2003), 11. Cultural, social, and technological changes will continueto drive companies for even better performance, faster, and with ideas as currency,which will continue to drive change in the buying process.
To understand the impact of the rapid changes occurring in the buying process, it’simportant to know the basic steps in the selling process. The next seven chaptersreview the selling process in detail and include insights into how the process ischanging. A study by William Moncrief and Greg W. Marshall provides a roadmapfor the evolution of the selling process in Table 6.2 "The Evolution of the SevenSteps of Selling".
Table 6.2 The Evolution of the Seven Steps of Selling
TraditionalSeven Steps of
SellingTransformative Factors Evolved Selling Process
1. Prospecting
• Telemarketing• Internet selling• Organizational
prospecting
Customer retention anddeletion
2. Preapproach• Laptop account data• Support staff
Database and knowledgemanagement
3. Approach • Build a foundationNurturing therelationship(relationship selling)
4. Presentation
• PowerPoint/multimedia• Listening• Team selling• Multiple calls• Value-added• Buying centers
Marketing the product
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TraditionalSeven Steps of
SellingTransformative Factors Evolved Selling Process
5. OvercomingObjections
• Predetermining needs Problem solving
6. Close • Identifying mutual goalsAdding value/satisfyingneeds
7. Follow-Up• Increased effectiveness of
communication throughtechnology
Customer relationshipmaintenance
Source: Reprinted from Industrial Marketing Management, 34/1, William C.Montcrief and Greg W. Marshall, “The Evolution of the Seven Steps of Selling,”13–22, Copyright (2005), with permission from Elsevier.
Buying Process Meets FAB
No matter how the buying process evolves, customers continue to make purchasedecisions driven by emotions. You learned how motivating trust and fear are forpeople who are making B2B buying decisions. Comfort, vanity, convenience,pleasure, desire to succeed, security, prevention of loss, and need to belong are allemotions that motivate purchases. A company may want to build a new buildingthat carries its brand name downtown to signal its importance to the city andbusiness community; that would be an example of vanity as a motivator. Or perhapsthe company wants to move its headquarters to a better part of town to providebetter security for its employees. Maybe a prominent figure in the communitydonates a large sum of money to your college motivated by the desire to give back.The same types of motivations apply to B2C purchases: a woman purchases makeupin the hopes of looking as beautiful as the model in the ads, a man buys a sports carin the hopes of turning heads, a student buys a microwave for the convenience ofhaving food when she wants it.
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Figure 6.10 NutritionalInformation
Source:http://www.thedailyplate.com/nutrition-calories/food/doritos/cool-ranch-ind-bag
Emotions are the driving force in so many B2C and B2Bpurchases that you might not even realize it. Considerthis: would you buy the product in Figure 6.10"Nutritional Information"?
Figure 6.11
The Doritos bag is more appealing than the nutritional information.
Source: http://fritolay.com/our-snacks/doritos-cool-ranch-chips.html
So how do you create the same type of emotional appeal with your customers? Theanswer is simple: FAB.
While you might not consider buying it based on only this factual information, youprobably have bought this product based on the emotional appeal of the packaging,advertising, and other marketing messages that tell you that the product is the bestlate-night snack.
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Consider this information that was on the home page of Amazon recently:
3G wireless means books in 60 seconds. No monthly fees, service plans or huntingfor Wi-Fi hotspots. Over 300,000 of the most popular books, newspapers, magazines,and blogs available.Amazon.com, http://www.amazon.com (accessed August 4,2009).
Amazon truly understands how to use FAB33, a selling technique that focuses onFeatures, Advantages, and Benefits, to sell its Kindle electronic reader. FAB is morethan a way of selling; it’s a way of thinking like your customers. Using the Kindle asan example, here are the details about how to use the FAB approach for effectiveselling.
• A feature34 is a “physical characteristic” of the product.Charles M.Futrell, Fundamentals of Selling: Customers for Life through Service, 10th ed.(New York: McGraw-Hill Irwin, 2008), 114. In the Kindle example above,the feature is the 3G wireless capability. Features are characteristics ofthe product; a feature comparison chart between the Kindle and theKindle DX is shown below.
Figure 6.12 Feature Comparison Chart between the Kindle and the Kindle DX
Source: http://www.amazon.com/dp/B0015T963C
• A product advantage35 is the “performance characteristic” of theproduct, or what the feature does.Charles M. Futrell, Fundamentals ofSelling: Customers for Life through Service, 10th ed. (New York: McGraw-Hill Irwin, 2008), 114. In the information about Kindle included at thestart of this section, the advantages of the 3G service are that the userdoesn’t need to hunt for Wi-Fi hotspots and that over 300,000 of themost popular books, newspapers, magazines, and blogs are available insixty seconds.
33. Selling technique that focuseson Features, Advantages, andBenefits.
34. A physical characteristic of aproduct.
35. The performance characteristicof a product that describes howit will help the buyer.
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• The benefit36 is the “result” the buyer will realize from the productbecause of the product advantage, or in other words, what the featuredoes or the result it delivers.Charles M. Futrell, Fundamentals of Selling:Customers for Life through Service, 10th ed. (New York: McGraw-HillIrwin, 2008), 114. The benefit of the Kindle is the fact that you can“rediscover reading anywhere, any time.”Amazon.com,http://www.amazon.com (accessed August 4, 2009).
Video Clip
Kindle FAB Story
Amazon created an entire video to tell the FAB story of Kindle.
http://www.amazon.com/Kindle-Amazons-Wireless-Reading-Generation/dp/B00154JDAI/ref=amb_link_84932831_1?pf_rd_m=ATVPDKIKX0DER&pf_rd_s=center-1&pf_rd_r=1SBQSS8P947CD5QK29MC&pf_rd_t=101&pf_rd_p=485413371&pf_rd_i=507846.
Notice how Amazon skillfully reinforces the benefit of portability by showingsomeone reading on a beach or a bus.
Why does FAB work? Because customers want to know what a product or servicewill do for them—not just what it’s made of. B2C and B2B customers seekinformation before making a buying decision but are also driven by emotions. FABhelps you appeal to a customer’s rational and emotional buying behavior byproviding the most compelling features and factual information and then showinghow the features provide an advantage that delivers a benefit. This is howsalespeople help customers establish an emotional connection with a product. Youremember from Chapter 1 "The Power to Get What You Want in Life" the power ofan emotional connection between a customer and a brand.
You probably use FAB sometimes without even realizing it. “My new Lucky Brandjeans have a dirty wash, fit great, and make me look thin. The best part is they wereon sale for only $89.00.” The features are the dirty wash and the fact that they wereon sale for $89.00; the advantage is that they fit well (no easy feat when it comes tojeans); the benefit is that they make you feel like you look thin and, as a result,make you feel good when you wear them. Your statement is much more powerful
36. The result a buyer will realizebecause of the productadvantage.
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when you frame it with FAB than if you simply say, “I got some new jeans today for$89.00.”
Or maybe you stopped into McDonald’s and tried one of their new Angus ThirdPounders. The product feature is that the burger is one-third of a pound and isavailable in three flavor options; the advantage is that it is thick and juicy; thebenefit is that you will enjoy the taste and your hunger is satisfied. The FABmessage is more compelling than simply saying that you had a hamburger that wasone-third of a pound; that would be stopping at the feature and not offering anadvantage or benefit.
If you want to be able to use FAB in conversation, simply think in terms of thefollowing:
• Feature: what the product has• Advantage: what the features do• Benefit: what the features meanLaura Clampitt Douglas, “Marketing
Features vs. Benefits,” Entrepreneur, http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessedAugust 4, 2009).,Bryan Eisenberg, “Want The to Buy? Sell Benefits,”ClickZ.com, April 9, 2001, http://www.clickz.com/840121 (accessedAugust 4, 2009).
Table 6.3 "FAB in Action" gives features, advantages, and benefits for some commonproducts.
Table 6.3 FAB in Action
Product Feature Advantage Benefit
HPPavilionComputer
250-GB harddrive
Enough space to storemusic, pictures, documents,and more.
Do more from playing videogames to downloading all ofyour favorite music and stillhave space for your homeworkprojects.
CaribbeanVacation
4 all-inclusivenights withairfare foronly $599 perperson
Don’t worry about how tobudget for the cost of thevacation becauseeverything is included inone low price.
Enjoy a spring break you willnever forget on a beach in theCaribbean.
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Product Feature Advantage Benefit
2010HondaInsight
40 mpghighway/43mpg city
Lower your gas prices witha fuel-efficient Insight.
Be kind to the environment andtravel in comfort for less withan Insight.
For example, if you were describing Netflix in terms of FAB, you might saysomething like the following:
For only $8.99 a month you can watch as many movies as you want and never becharged a late fee. You can order online and have a DVD delivered in about a dayand exchange it as many times as you want without a late fee, or you can watchstreaming video of your favorite movies online anytime. Now that’s totalpersonalized entertainment.Netflix, http://www.netflix.com (accessed July 12,2009).
Now look at this FAB statement with the features, advantages, and benefits in bold:
For only $8.99 a month [feature] you can watch as many movies as you want andnever be charged a late fee [advantage]. You can order online and have a DVDdelivered in about a day [advantage] and exchange it as many times as you wantwithout a late fee [advantage], or you can watch streaming video of your favoritemovies online anytime [advantage]. It definitely saves you time and money[benefit] and gives you total personalized entertainment [benefit].
It’s easy to remember by using the FAB framework as your guide.
[Name feature] means you [name advantage] with the real benefit to you being [namebenefit].Charles M. Futrell, Fundamentals of Selling: Customers for Life through Service,10th ed. (New York: McGraw-Hill Irwin, 2008), 116.
Here’s another example, based on research about the 2009 Nissan Cube:Ben Stewart,“2009 Nissan Cube vs. Kia Soul vs. 2009 Scion xB: 300-Mile Fuel-Economy Test-Drive,” Popular Mechanics, February 24, 2009, http://www.popularmechanics.com/blogs/automotive_news/4306145.html (accessed August 4, 2009).
The Nissan Cube has funky, Japanese-like design and is friendly to the environmentwith a fuel-efficient 1.8-liter, 4-cylinder engine that gets over 30 miles per gallon.It’s hip, cool, and fun to drive. At $15,585, it’s a great value for the money.
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How to Use FAB
Now that you know what FAB is, you probably want to know how to use it mosteffectively in selling. Here are three easy steps to put FAB to work for you:
1. Know your customer. Benefits speak emotionally to customers in away that rational facts can’t. But you need to know what is importantto each customer. The health club that’s open twenty-four hours mightbe attractive to a young professional because he can work out late inthe evening after a long day, whereas the club’s day care center mightbe appealing to a young mother. Similarly, in a B2B selling situation inwhich a buyer is evaluating warehouse space, one customer might beinterested in the warehouse because of its state-of-the-art systems,while another might be focused on location. Know what motivates yourcustomer, and then you can craft an effective FAB statement.LauraClampitt Douglas, “Marketing Features vs. Benefits,” Entrepreneur,http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessed August 4, 2009).
2. Think outside your box. If you want your FAB to work for yourcustomer, you will need to deliver value in the form of benefits thatshe can’t get from anyone else. Think about your product or service ina different way; talk to people, watch the trends, see what else you canbring when you look at your product or service in a different way.Baking soda had traditionally been used as a leavening agent forbaking. Arm & Hammer reinvented baking soda as a way to removeodors from refrigerators. Can you be as creative with the applicationfor your product or service?Laura Clampitt Douglas, “MarketingFeatures vs. Benefits,” Entrepreneur, http://www.entrepreneur.com/magazine/homeofficemagcom/2000/december/34942.html (accessedAugust 4, 2009).
3. Get in touch with your customer’s motivation. Listen, learn, andcraft an FAB message that will “have your customer at hello.”IMDB,Jerry McGuire, written and directed by Cameron Crowe, releasedDecember 13, 1996, http://www.imdb.com/title/tt0116695 (accessedAugust 4, 2009). Although that might be an overly romantic notion ofhow selling works, your goal is to have your customer fall in love withyour product or service so much that it’s something he can’t livewithout. Imagine living without iTunes, your cell phone, or yourfavorite pair of jeans. That’s how your customer should feel about theproduct or service you are selling. If you understand his motivation,you can deliver features, advantages, and benefits that not only tellhim why he should buy, but why he can’t afford not to.
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KEY TAKEAWAYS
• The traditional B2B buying process has seven steps: need recognition,defining the need, developing the specifications, searching forappropriate suppliers, evaluating proposals, making the buyingdecision, and postpurchase evaluation.
• The Internet is a game-changer as it relates to the buying processbecause information is no longer the exclusive domain of thesalesperson; the power has shifted from the seller to the buyer.
• Crowdsourcing occurs when a company takes a job that is traditionallydone by an employee and issues an “open call,” usually online, to peopleall over the world to solve the problem. Salespeople can usecrowdsourcing to get the best solutions for their customers.
• Emotions such as comfort, security, convenience, pleasure, and vanityare major motivations for buying decisions.
• Trust and fear are especially important in B2B buying because thedecision maker has to consider organizational risk and personal riskas part of his buying decision.
• The buying process continues to evolve, which changes the sellingprocess; the traditional selling process provides a foundation and insightinto the evolution.
• FAB (a.k.a. features, advantages, benefits) is the way to appeal toyour customer’s emotions with factual and emotional appeals.
◦ A feature is what a product has.◦ An advantage is what the feature does.◦ A benefit is what the features mean to the customer.
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EXERCISES
1. Identify a recent major purchase that you made recently. How did yourecognize the need for the product or service? Where did you go togather information about the options that were available to you? Didyou use one method or a combination of methods?
2. Contact a buyer at the headquarters of a retailer such as Dick’s SportingGoods, GameStop, Costco, Urban Outfitters, or another company. Askhim about the process he uses to determine which products to put in theretail stores. Is his process similar to the process outlined in thischapter? How does it differ? How does his postpurchase evaluationimpact his decision to buy the product again?
3. Watch the following video:
(click to see video)
Source: Jarad Hill
Based on the comment that “customers don’t want to be sold,”what should a salesperson do to sell to a customer? Identify anexample of a good buying experience and a bad buyingexperience that you have had recently. Did the salesperson “sell”to you?
4. Describe a situation in which a salesperson might use crowdsourcing.5. Assume you are a salesperson for a major telecommunications company
and you are calling on a major construction company that is consideringbuying smart phones for the key people in the company. Describe atleast one organizational risk and one personal risk that might beinvolved in the customer’s decision.
6. Identify a feature, advantage, and benefit for each of thefollowing products and services:
◦ MTV◦ Kia Sportage◦ Palm Pre◦ Virgin Mobile phone
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6.3 Selling U: Developing and Communicating Your Personal FAB
LEARNING OBJECTIVES
1. Understand how to develop your personal FAB message.2. Learn how to make your FAB message memorable in an interview.
You can see that FAB is a powerful way to build an emotional connection with acustomer. It is also an excellent way to stand out to a prospective employer in aninterview. You’ll learn more about the interviewing process in the Selling U sectionof Chapter 10 "The Presentation: The Power of Solving Problems", but now it’s agood idea to do some advance preparation.
You’ve already done a lot of work that will serve you well as you network andinterview—you’ve identified your brand positioning points in the Selling U section ofChapter 1 "The Power to Get What You Want in Life", put them to work in yourrésumé and cover letter in Chapter 2 "The Power to Choose Your Path: Careers inSales", and developed your elevator pitch in Chapter 5 "The Power of EffectiveCommunication". All these activities help you bring your personal FAB (feature,advantage, benefit) message into focus. Your FAB message will help you tell thedetails about your brand and will help you tell your “stories” about your experienceand accomplishments during your interviews.
Stories Paint Pictures
If getting the job or internship you want were only about the facts, you would onlyneed to present your résumé on a job interview. But prospective employers arelooking for that “certain something,” an emotional connection that helps themknow that you are the one.Bryan Eisenberg, “Buying Is Not a Rational Decision,”ClickZ, November 26, 2001, http://www.clickz.com/927221 (accessed August 1,2009). Every candidate comes into an interview trying to impress the intervieweeand saying how much he wants the job. Why not stand out, show, and sell?
Think about your three brand positioning points you developed in Chapter 1 "ThePower to Get What You Want in Life". Now, think about the stories thatdemonstrate each one in terms of FAB. Table 6.4 "Personal FAB Example" shows yousome examples.
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306
Table 6.4 Personal FAB Example
BrandPositioning
PointFeature Advantage Benefit
MarketingExperience
Had aninternship atan advertisingagency
I worked on the Limited,Too account developingTwitter conversations withtarget customers.
I can help SpitFire engage itscustomers directly and learnabout shopping preferencesusing social networking.
CustomerServiceExperience
Worked as aserver at OliveGarden
I interacted withcustomers and providedexcellent customer serviceunder pressure.
I understand how to handlemultiple tasks under pressurewithout losing my cool.
LeadershipExperience
President ofYoungEntrepreneursClub
I developed a forum forlocal investors to regularlyhear pitches from studententrepreneurs, which ledto the launch of three newproducts.
I understand the process ittakes to turn ideas intoprofitable businesses, and I’mable to be the driving forcebehind bringing people, ideas,and money together.
Every Picture Tells a Story
Take your FAB one step up and create a portfolio37 that you can show during jobinterviews. When you tell someone about your experience and accomplishments,that’s good, but showing them really helps you stand out in the crowd. If you arelucky enough to get an interview, capitalize on the opportunity to sell yourself.Keep in mind that most companies interview at least two or three people, andsometimes more, before they make their hiring decision.
A portfolio isn’t just for creative or advertising people; everyone should have aportfolio. It is simply a collection of samples of your work from class projects,internships, volunteer projects, and any other work that demonstrates yourskills.“Job Search: Back Up Your Resume with a Portfolio,” WorkForce2.org,http://www.workforce2.org/resume-portfolio.htm (accessed August 5, 2009).Creating a portfolio is as simple as putting samples of your work in a three-ringbinder. You might find it helpful to view this video about how to create a portfolio.
Video Clip
How to Create Your Portfolio
(click to see video)
37. A collection of work samplesfrom class projects, internship,volunteer projects, and anyother work that demonstratesyour skills.
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Source: MonkeySee.com
You probably have more samples of your work than you think. And each sample isan excellent way to show and tell your FAB. Here are some ideas about what to putin your portfolio:
• Class projects. Choose those projects that demonstrate your skills,especially in your major. For example, if you did a sales presentation,include a video clip along with your selling aids. Or if you created a PRplan, include the plan along with the exhibits. Group projects areacceptable as long as the group names are included on the title page. Ateam project allows you to talk about how you provided leadership tothe team or helped the team get focused.
• Internship projects. If you had an internship or multiple internships,include samples of the projects on which you worked. For example,include copies of Web pages, brochures, flyers, graphs, presentations,or other samples of your work.
• Volunteer projects. If you have been involved in a student group,community service, or other service organization, include samples ofthe projects on which you worked. For example, if your group did afundraiser for breast cancer, include the flyer for the event along withphotos and a summary of the contributions.
You’ve Got the Power: Tips for Your Job Search
Keep a Copy
Whenever you work on a class project, internship, volunteer project, or anyother type of project that demonstrates your skills, keep a copy for yourportfolio. The same is true when you begin working; keep copies of all yourprojects to continue to build your portfolio throughout your career. You neverknow when you will need to show samples of your work. It’s best to avoidincluding any confidential or proprietary information from companies ororganizations.
• Other work samples. If you enjoy photography, writing, design,selling on eBay, or other activity that has application to the positionfor which you are seeking, include that work. In other words, print the
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Web page for your eBay store along with the feedback you havereceived, include photographs or other projects on which you haveworked to show your work. If you don’t have samples of your work foryour portfolio, consider starting a blog and print copies of your entries.
• Letters of recommendation. Ask for a letter of recommendation fromformer supervisors, colleagues, team leaders, professors, and otherpeople who will be happy to write a letter about your skills.MaureenCrawford Hentz, “How to Obtain and Use References andRecommendation Letters,” Quintessential Careers,http://www.quintcareers.com/references_recommendation_letters.html (accessed August 5, 2009) Ifyou have had a summer job or internship, ask your former boss andother people with whom you worked to write a letter ofrecommendation. Keep the copies of the letters in your portfolio andshow them to prospective employers during your interview. Althoughthese letters are different from references, they serve the purpose ofshowing your prospective employer how highly people regard you andyour work. You will be asked for references after the interview processif you are one of the final candidates. See the Selling U section inChapter 4 "Business Ethics: The Power of Doing the Right Thing" formore information about how to contact and submit references,including how letter of recommendation from references can help setyou apart.
Tips to Make Your Portfolio Even More Powerful
After you gather all of your work samples, here are a few tips that will help youorganize them for an effective visual story.
• Choose a few work samples. Select samples (no more than five or six)that reflect your brand positioning points. If leadership is important,be sure to include projects, results, pictures, and other visual elementsthat will demonstrate your leadership story.
• Create a summary page for each work sample. Include bullet pointsfor the project name, objective, approach or strategy, and results. Asample is provided in Figure 6.13 "Sample Summary Page". This willhelp you quickly summarize the key points when you are showing yourportfolio.
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Figure 6.13 Sample Summary Page
• Use clean copies, in color where appropriate. Avoid using papersthat include comments or grades. Use fresh, clean copies of all samples.If you need to make a copy of an original document that was in color,splurge and pay for color copies; it’s worth it.
• Include extra copies of your résumé. Your portfolio is a great placeto keep at least three or four extra copies of your most current résuméprinted on twenty-four-pound paper. Although your interviewer mayhave already received your résumé before the interview, he may nothave it handy when you come in. Or you may be asked to meet withsome people that were not on the original interview schedule. If this isthe case, you can be the consummate professional and offer yourinterviewer a reference copy of your résumé. It’s also the perfect timeto mention your portfolio.
• Use a professional binder or portfolio. Visit a local or online artsupply or office supply store and get a professional three-ring binderor portfolio. You can include your work samples in plastic sleeves, butit is not required. Many portfolios include plastic sleeves for yoursamples. Ask if the store offers a student discount.
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Make It Memorable
As you develop your FAB and portfolio, think about the stories you want to tellabout each one. Stories are much more powerful than facts. For example, “I canreally appreciate what it takes to go the extra mile for a customer. When Iworked at J&J Catering, they needed someone to mix the giant vats of cookiedough. Needless to say, I spent hours working with the dough, but I wanted tomake it interesting, so I learned how ingredients work together, and I created anew recipe for lemon cookies that became the signature dessert of thecompany.”
www.You.com
A portfolio is a must to bring on a job interview. You might be wondering if it’s agood idea to also create an online portfolio. The answer is “yes.” Creating your ownprofessional Web site as a way to showcase your résumé, samples of your work,awards, and letter of recommendation is a perfect way to build your brand anddemonstrate to your prospective employer that you have additional technologyskills.
Your online portfolio, or Web site, should include all the elements that are includedin your offline portfolio. Since space is not an issue, you may want to include evenmore samples of your work, especially if you have writing or design samples. This isalso an ideal place to include a link to your blog.
A word of caution: Your professional Web site should be exactly that—professional.That means no personal photos, comments, or casual blog posts from friends. Inother words, your Facebook page is not an appropriate place for your professionalWeb site. Use a business-like domain name (http://www.yourname.com); if youdon’t already have one, you can get one at Google or GoDaddy.com, for a minimalannual fee. The following article provides six steps to set up a domain name andyour own Web site.
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Video Clip
Six Steps to Set Up a Domain Name and Personal Web Site
http://www.ehow.com/how_4390_set-personal-domain.html
Use your online portfolio as a way to sell yourself on your résumé: add your Website address to your contact information and mention it in your coverletter.Resumemic09, “What Is a Portfolio and How Can I Use One to Get a Job?”video, July 24, 2009, http://www.youtube.com/watch?v=PrHI0m0B1l4 (accessedAugust 5, 2009). See résumé and cover letter samples in the Selling U section inChapter 2 "The Power to Choose Your Path: Careers in Sales".
How to Use Your Portfolio in an Interview
It’s always best to bring your portfolio to every interview, even if it’s aninformational interview. In most cases, the interviewer will not ask you about yourportfolio so you will have to bring it up in the conversation. The following videoprovides some tips about how to introduce your portfolio during an interview.
Video Clip
Using a Portfolio in an Interview
(click to see video)
Learn how to use your portfolio to make the sale and get the job you want.
Source: Prima Civitas Foundation
Be proud of showing your work samples. The Financial Times, in reference to PeggyKlaus’ book Brag: The Art of Tooting Your Own Horn Without Blowing It, wrote, “Startbragging…if you don’t speak up for yourself, who will?”Peggy Klaus, Brag: The Art ofTooting Your Own Horn Without Blowing It (New York: Hachette Book Group, 2003),front cover. To ensure that you are getting all of your FAB points across, it’s best torehearse how you will review your portfolio in an interview. Keep in mind that timeis short so it’s best to be concise and underscore the FAB points you want yourinterviewer to remember. A portfolio is an excellent visual tool that makes your
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FAB message come alive for your prospective employer. The bottom line is, “If youwalk into an interview empty-handed, you’re missing an opportunity.”“How toCreate an Awesome Work Portfolio,” ManifestYourPotential.com,http://www.manifestyourpotential.com/en/work/tensteps/4preparework/howto/jobsearch/portfolio.htm (accessed August 5, 2009).
KEY TAKEAWAYS
• Develop your FAB message using your brand positioning points as afoundation. Develop one or more FAB messages for each point.
• Create a portfolio to bring on job interviews to visually tell your FABmessages. Include extra copies of your résumé, samples of your workfrom class projects, internships, volunteer work, and relevant hobbies ina professional three-ring binder. Be sure all samples are clean and are incolor where appropriate.
• You can also create an online portfolio on a professional Web site thatincludes the same information as your physical portfolio. Also includeyour Web site address in the contact information on your résumé andmention it in your cover letter.
• Be ready to introduce and review your portfolio in an interview; you’llneed to take the initiative as your prospective employer won’t know youhave work samples to show.
• Be proud of showing your work samples. Rehearse exactly what you willsay about each sample and keep it concise.
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EXERCISES
1. Write down your FAB using the chart below. What examples orstories can you tell about each one?
BrandPositioning
PointFeature Advantage Benefit
2. Identify at least four samples of your work that you can include in yourportfolio. Discuss which FAB message each sample demonstrates. Createa summary sheet for each sample.
3. Shop online or in a local art supply or office supply store and identify aprofessional binder or portfolio for your samples.
4. Review your portfolio with a professor, supervisor, or otherprofessional. Ask for feedback on your portfolio and presentation.
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6.4 Review and Practice
Power Wrap-Up
Now that you have read this chapter, you should be able to understand why and how people buy in B2C and B2Bsituations.
• You can describe the types of customers and why this information is important in determiningcustomers’ needs.
• You can discuss the implications of Maslow’s hierarchy of needs for selling.• You can learn the types of buyers and buying situations in a B2B environment.• You can list the steps in the buying process and describe how and why the process is evolving.• You can understand the role of emotions in the buying decision.• You can learn how to use FAB for effective selling.• You can understand how to develop your personal FAB message.• You can learn how to make your FAB message memorable in an interview.
TEST YOUR POWER KNOWLEDGE (ANSWERS ARE BELOW)
1. Describe the three types of B2B customers and what makes themdifferent.
2. Name at least three differences between a B2C and a B2B purchase.3. Describe two products or services a B2B purchaser would buy to meet
esteem needs.4. True or false: B2B buying decisions are rational.5. True or false: The initiator in a B2B buying situation is also the decision
maker.6. Describe the first step in the buying process.7. What is an RFP, and at which stage in the buying process is it used?8. Describe FAB and how it is used in the selling process.
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POWER (ROLE) PLAY
Now it’s time to put what you’ve learned into practice. Following are tworoles that are involved in the same selling situation—one role is thecustomer, and the other is the salesperson. This will give you theopportunity to think about this selling situation from the point of view ofboth the customer and the salesperson.
Read each role carefully along with the discussion questions. Then, beprepared to play either of the roles in class using the concepts covered inthis chapter. You may be asked to discuss the roles and do a role-play ingroups or individually.
The Best Way to Reach Boomers
Role: Director of marketing at Shooz Athletic Shoe Company
Sales have been far less than expected as a result of the economy. Shoozbrand athletic shoes are targeted to baby boomers; they are flexible andcomfortable, yet look cool. They are priced higher than the competition, andit seems to have been suffering at the hands of the promotional efforts ofcompetitors. But the marketing strategy of Shooz is to continue to focus onits niche and be higher priced, despite the sinking economy.
You have a limited advertising budget that has been devoted primarily totelevision advertising. You are in the process of reviewing the numbersbefore your next meeting.
• Should you be open to new options and ways to increase your business?• What role could a salesperson play in helping you think about different
advertising options?
Role: Internet advertising salesperson
You are a salesperson for an advertising company named Online MarketingConcepts. You sell banner ads, e-mail, and social networking advertising forseveral online networks. Despite the growth of Internet advertising in thepast several years, online advertising sales have been down due to theeconomy, which has had an impact on your paycheck. You would really liketo get the Shooz account to buy some Internet advertising. You’ve done yourhomework, and you think that online advertising could really help the
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Shooz business. You haven’t found any ads online for Shooz, and you have agreat idea for an interactive advertising campaign targeted to babyboomers. Now, you’re confident that if you get in front of the right person,you can see your idea and help Shooz grow its business.
• What step in the buying process is the director of marketing currentlyin?
• How might you prepare for this sales call based on what you know?• How will emotions come into play in the purchase of advertising for
Shooz?
PUT YOUR POWER TO WORK: SELL ING U ACTIVITIES
1. Ask a professor, mentor, or other professional to share her portfoliowith you. Ask her how she gathered examples of her work that sheshows to prospective customers or employers. Ask for feedback on yourportfolio.
2. Create an online portfolio including your résumé, samples of your work,letters of recommendation, awards, and other proof of your skills.Review Web sites such as http://sites.google.com andhttp://www.myevent.com. Don’t forget to include your URL on yourrésumé in the contact information area.
3. Create a blog to demonstrate your skills. Review Web sites such ashttps://www.blogger.com/start and http://wordpress.com as possiblehosts for your blog. Choose a topic that you are passionate about (sports,music, movies, fashion, or whatever moves you). Follow the directions topersonalize your blog and start writing. Remember to make regular andfrequent posts; there’s nothing less professional than an out-of-dateblog. Keep it professional. Promote your blog on Facebook, Twitter,LinkedIn, and other professional networking Web sites.
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TEST YOUR POWER KNOWLEDGE ANSWERS
1. Producers are companies or organizations that buy parts or ingredientsto make a product or service. Resellers are companies or organizationsthat buy finished products or services to sell them to other companies orconsumers. Organizations are government or nonprofit groups that buyproducts or services for consumption or to be sold to companies orconsumers.
2. Size of purchases, multiple buyers, number of customers, andgeographic concentration.
3. A building that bears the company name; doing business with only thosecompanies that have the best reputations, such as McKinsey & Company;hiring only people who have an Ivy League education.
4. False. B2B decisions are dominated by emotions, especially trust andfear.
5. False. Although the initiator may be the decision maker, that is notalways the case, especially in complex B2B buying decisions.
6. Need recognition includes the realization that there is a need for theproduct or service. The need might be identified by a user or anyoneelse inside the organization or by a customer.
7. The request for proposal is part of step four: searching for appropriatesuppliers.
8. Feature, advantage, benefit is used in B2B and B2C selling and is used toappeal to a customer’s emotions as in “what will this product or servicedo for me?”
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